2003 JAPAN LAW: BREACH OF TRUST
Keywords: Corporate Law, Breach of Trust
Copyright 2004. All rights reserved Attorney Roderick H. Seeman
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The former chairman of Duskin Co. was arrested in June, 2003 on charges of aggravated breach of trust. Prosecutors allege that the chairman had misappropriated 180 million yen in corporate funds. The money was allegedly spent on helping out the troubled firm owned by a friend, who was also arrested. There was a cover-up where they made a contract for making the payment in exchange for design services for freebies given to Dunkin Donuts customers. Apparently there never was any such design services provided. The payments were made without the knowledge of the board of directors. A former senior managing director who had cooperated in the scheme was later given a two year suspended sentence on the case for breach of trust. As a result of the transaction, Osaka Tax Authorities called the 180 million yen a taxable donation. They also claimed that the company failed to report 600 million yen in income in 2001. Earlier police referred a case against Dunkin Donuts, owned by Duskin, for violating the Food Sanitation Law for using banned additives in their meat dumplings.